DirecTV Rejects Disney’s Offer to Stream Presidential Debate for Free
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DirecTV Rejects Disney’s Offer to Stream Presidential Debate for Free

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DirecTV refused to accept Disney’s offer of restoring ABC News feed for only three hours to stream the presidential debate yesterday. The two parties are at loggerheads on the terms and fees of contract renewal, as negotiations run into the second week.

America’s second-largest cable TV operator DirecTV rejected The Walt Disney’s (DIS) offer of streaming the Presidential debate for free only for three hours last evening. The broadcast of the debate between Presidential candidates Kamala Harris and Donald Trump on Disney’s ABC News was one of the most viewed shows yesterday.

Disney offered to turn on the ABC channel feed only for three hours on Tuesday so all American viewers could watch the debate. However, DirecTV rebuffed the offer saying it would confuse its subscribers since the channel would quickly go dark again. DirecTV demanded that Disney restore all of its 16 channels through September 17, allowing subscribers to view the 76th Emmys and Monday Night Football. However, Disney rejected the counteroffer.

Heated Argument Over Contract Renewal

DirecTV and Disney have been arguing about the terms of renewal of distribution rights for streaming Disney’s channels on the cable TV operator’s platforms. The tiff between the two also resulted in DirecTV viewers missing the much-awaited start of the season’s first Monday Night Football (NFL) game. On Saturday, DirecTV filed an FCC complaint, accusing Disney of acting in bad faith and displaying anticompetitive behavior.

The contract dispute has entered the second week since the old contract expired on September 1, leading to roughly 11 million DirecTV viewers missing some of their most loved Disney shows. The two companies have been negotiating the terms and fees of the contract. DirecTV argues that Disney is not giving them enough liberty to bundle the channels as per viewers’ preferences. Meanwhile, Disney is arguing that DirecTV is undervaluing its channels and that restoration of its channels remains “completely within their control.”

DirecTV wants to offer “skinnier” bundles of Disney’s channels as more and more viewers cut the cord and shift to online streaming services. Media companies themselves are offering skinnier options to viewers as cord-cutting is eating into their margins.

Analysts’ Views on the DirecTV-Disney Dispute

Needham analyst Laura Martin believes that the dispute is hurting both the players alike. While Disney wants to keep increasing prices, DirecTV wants to pay less to protect its margins since its cable margins are already down. She added that such arguments are going to become more common with the ongoing industry-related headwinds.

Meanwhile, analyst Tim Nollen of Macquarie thinks that DirecTV stands to lose more because it does not have a broadband network and depends completely on pay TV channels for streaming. DirecTV is simply a satellite provider and cannot bundle linear channels with streaming for viewers, giving Disney an upper hand in negotiations.

Nollen further stated that Disney has the option to partner with other distributors and continue to win viewership. However, it would be losing on DirecTV’s over 11 million viewers and the related advertising demand.

What Is the Price Target for DIS Stock?

Wall Street remains optimistic about Disney stock’s trajectory despite the challenges related to parks visitations and cord-cutting. On TipRanks, the average Walt Disney price target of $118.53 implies 34.1% upside potential from current levels. Year-to-date, DIS shares have lost 1.7% of their value.

See more DIS analyst ratings

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